“This was within the government’s growth forecast of 4% to 4.5% for 2016, whereas first half of 2016 (1H16) growth of 4.05% was just above the low end of the range,” StanChart said in the statement.

It also state that the risks to the Malaysian economy remain to the downside.

“Private consumption may have been boosted by measures such as voluntary cuts to the employee pension fund and minimum wage hikes, [while] one-off payouts to civil servants may have helped bolster spending.

Based on GDP data, exports of goods and services fell 1.3% y-o-y in 3Q16, deteriorating from the 0.2% decline in 1H16. However, the GDP growth was mitigated as imports declined more than exports in 3Q.

“Although BNM recognises the challenging global economic conditions, we believe that further deterioration will require a monetary policy adjustment.

“Potential trade protectionist policies from the US and a hard impact on euro-area growth from Brexit are key risks that need monitoring.

“China remains the elephant in the room, but growth risks in the country appear stable for now,” it said.

The statement also noted that StanChart will be closely monitoring the impact of the related uncertainty of Donald Trump’s victory in the recent US presidential election on Asian financial markets.